Maryland Suspends Gas Tax to Offset Inflation at the Pump
The gas tax holiday will save Maryland drivers about 36 cents per gallon for gasoline and roughly 37 cents per gallon for diesel fuel.
As gas prices surge across the country, the federal government and various states are considering gas tax holidays – that is, temporarily suspending gas taxes to help bring down the price of fuel for consumers. On March 18, Maryland became the first state in the country to actually enact a gas tax holiday this year, which takes effect immediately and will last for 30 days.
According to AAA, the average price for a gallon of regular unleaded gas in Maryland on the first day of the state's gas tax holiday was about $4.17 per gallon. Suspending the state's fuel taxes will save Marylanders 36.1¢ per gallon on purchases of gasoline, and the 36.85¢ per gallon for diesel fuel.
Before signing the bill, Gov. Larry Hogan (R) noted that, "as Marylanders face the impact of surging inflation, with the average price of gas rapidly rising, this bipartisan action will provide some relief from the pain at the pump." But there are questions across the country concerning exactly how much relief gas tax holidays actually provide, and whether the level of savings per person justify the overall loss of revenue.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
A Marylander who drives 12,000 miles a year in a car that averages 25 miles per gallon will save a less than $15 in gasoline taxes during the 30-day suspension. On the other hand, according to the governor's office, the suspension is expected to cost the state close to $100 million, which will be covered indirectly by the state's record budget surplus.
The governor is also backing legislation that would suspend automatic increases in the state's gas tax. So, more gas tax relief may be on the way for Marylanders.
Georgia also enacted a gas tax holiday on March 18. It will last until the end of May. Whether gas-tax relief measures to offset inflation at the pump move forward in other states remains to be seen. Florida may be the next state to enact a gas tax holiday. The state legislature passed a bill that would suspend the state's fuel tax for 30 days – but not until October. On the federal level, efforts to suspend the national 18.4¢ per gallon gas tax appear to be stalled.
To continue reading this article
please register for free
This is different from signing in to your print subscription
Why am I seeing this? Find out more here
Rocky Mengle was a Senior Tax Editor for Kiplinger from October 2018 to January 2023 with more than 20 years of experience covering federal and state tax developments. Before coming to Kiplinger, Rocky worked for Wolters Kluwer Tax & Accounting, and Kleinrock Publishing, where he provided breaking news and guidance for CPAs, tax attorneys, and other tax professionals. He has also been quoted as an expert by USA Today, Forbes, U.S. News & World Report, Reuters, Accounting Today, and other media outlets. Rocky holds a law degree from the University of Connecticut and a B.A. in History from Salisbury University.
-
Is a Phased Retirement Right for You?
Want to keep working, just not as hard? A phased retirement may just be the answer.
By Kimberly Lankford Published
-
Four Tips to Make Your Sales Presentation a Winner
Being prepared and not being boring can go a long way toward persuading a potential customer to buy into what you’re offering.
By H. Dennis Beaver, Esq. Published
-
'Instant' EV Tax Credits Are a Hit: $580M Paid This Year
EV Credits Claiming federal electric vehicle tax credits at the point of sale is a new and popular option in 2024.
By Kelley R. Taylor Last updated
-
Retirees Face Significant Tax Bills Due to Fraud
Fraud A new report sheds light on how older adult scam victims end up with big tax bills and lost retirement savings.
By Kelley R. Taylor Last updated
-
Tax Day: Is the Post Office Open Late?
Tax Filing Tax Day means some people need to mail their federal income tax returns.
By Kelley R. Taylor Published
-
High Earners: Beware of These Illegal Schemes to Lower Taxes
Tax Schemes The IRS says high-income filers are targets for several illegal tax schemes.
By Katelyn Washington Last updated
-
Mailing Your Tax Return This Year? What to Know Before You Do
Tax Filing There are plenty of reasons not to mail your tax return this year, but here’s what you should know if you are.
By Katelyn Washington Last updated
-
A Bunch of IRS Tax Deductions and Credits You Need to Know
Tax Breaks Lowering your taxable income is the key to paying less to the IRS. Several federal tax credits and deductions can help.
By Kelley R. Taylor Last updated
-
IRS Warning: Beware of Smishing and 'Helper' Tax Scams
Scams Tax season is a time to look out for email and text message scams.
By Kelley R. Taylor Last updated
-
Most Expensive States to Live in for Homeowners
Property Taxes High property tax bills make the places on this list the most expensive states for homeowners to live in.
By Katelyn Washington Last updated